PEORIA — Before the City Council decides whether to OK a change in the management of the Marriott Pere Marquette and Courtyard by Marriott in Downtown Peoria, its members have some questions.

Those queries, likely to come at Tuesday’s council meeting, cover a wide range of subjects, from financial viability to how the employees are treated, officials said in a series of interviews during the last week.

Developer Gary Matthews’ company EM Properties is seeking the management switch from Marriott International Inc. to Rosemont-based First Hospitality Group, but the buildings still would carry the Marriott name.

Council members have a say because of a 2011 agreement with EM Properties in which the city authorized a $29 million bond and a $7 million loan as part of the roughly $100 million project. The Pere Marquette re-opened last June, and the Courtyard next door is under construction and slated to open within months.

City officials have indicated such a change isn’t unusual, but council members still want to know more. City Manager Patrick Urich said he and city staff are continuing to work to answer those questions — including with additional conversations Monday with FHG as well as with Matthews.

“By all accounts, they seem to be a very well-managed company,” Urich said of FHG on Friday.

But for some, it’s a matter of just being able to better understand the rationale behind the change.

Asking questions

“With the investment dollars we have in play in this, we just need to ensure the logic,” 3rd District City Councilman Tim Riggenbach said. “If we can continue to ensure a better quality product at the same cost, then I don’t see why we wouldn’t (approve the change).”

Fifth District City Councilman Casey Johnson agreed the change seemed to be designed to provide a better value and suggested he’d like to know more about how the new firm would work to continue to build revenue-producing business like hosting banquets and other events at the facility.

Ensuring it’s just to improve service without sacrificing any quality is important to at-large City Councilman Chuck Weaver.

“It will be important that the city is certain a change of management will be focused on increasing the top-line sales of the hotel and not a cost-cutting measure,” he said. “We have to be sure the hotel is healthy over the long term.”

Along those lines, at-large City Councilwoman Beth Jensen said she wants to know not just what hotels FHG currently manages, but the names of the hotels they have managed during the last decade, to be certain the company has the expertise to oversee a full-service downtown hotel.

Page 2 of 3 - Many of the hotels FHG manages appear to fall under a broader, mid-range classification that caters to standard business travel, though there are some facilities — including one in downtown Chicago — that would fall under the same category as the Pere Marquette.

First District City Councilwoman Denise Moore expressed her confidence on that score, but said it was important to her to find out whether employees would see the same — or even better — treatment and training under FHG.

“We are about 30 days out from opening the Courtyard,” she said. “If you’re opening up a major operation, you usually have people in training. I’d like to have them tell me how they’re preparing to open up the Courtyard.”

She also said it was important for existing employees to learn quickly whether they’ll be able to retain their jobs under a new management firm.

More clarity overall is necessary for 2nd District City Councilman Chuck Grayeb, who described the explanations so far as “an enigma wrapped in a mystery wrapped in a riddle, and it should not be because of the large amount of public money involved in that project.”

Balance sheet

Nearly all council members who spoke said they hoped to learn more about the hotel’s financial performance since last June. Members of the public, though, are not likely to hear that information because of a confidentiality agreement between the city and EM Properties that prohibits any release of financial data, including overall performance and the percentage of rooms filled. Urich also said he could not provide information on taxes brought in by the hotel, its Table 19 restaurant or the additional taxes brought in because it is in the city’s Downtown’s Hospitality Improvement Zone.

He did say, however, that “they’re in the ballpark in terms of projections that we had.”

City staff had produced a financial analysis that looked at “high” “middle” and “low” revenues — all of which, staff indicated, would be sufficient to cover project costs — but Urich declined to specify where the performance thus far by the hotel would fall under those particular bands in its first 10 months of operation.

Assistant City Manager Chris Setti said the initial months for most hotel properties are more volatile, and that a more accurate representation of how a property is doing usually comes after it’s been operating longer.

“The real important numbers to hit are the ‘stabilized’ numbers in year three,” he said.

Getting more

The council also may wish to use the fact that its imprimatur is needed on any change of management firm opportunity to push for more public financial data on the properties, Weaver implied.

Page 3 of 3 - “Considering the amount of cash the city put into this project, this may be a good time to negotiate the city’s ability to have access to hotel finances,” he said.

Getting more information was important to a number of other council members as well.

“I would hope that we would err on the side of openness to the public since there’s a considerable public investment there,” Grayeb said.

Others agreed that more could be done to raise the curtain on operations to give taxpayers more confidence.

“When public money is involved, I expect a high level of transparency,” Moore said. “If you don’t want public money, the spotlight isn’t on you. … There is some responsibility on the developer to have as much transparency as possible.”

She did agree, though, that there are different degrees of transparency that are appropriate at different points in a development.

Meanwhile, Riggenbach said he wasn’t sure of the logic behind the agreement, but noted that he thought the city had improved in the last several years at being responsive to concerns about openness.

For his part, Johnson said he believes Weaver’s suggestion raises a fair question, but that there’s also a fine line to draw.

“Are you putting the hotel at a competitive disadvantage because you’re putting out too much information for its competitors?” he asked.

That’s essentially the reason behind shielding the data, Urich said.

He said he wasn’t aware of any other communities across the country that had a monetary interest in a hotel and did not also have an agreement in place prohibiting the release of financial information because of the extremely competitive nature of the industry.

Chris Kaergard can be reached at 686-3135 or ckaergard@pjstar.com. Follow him on Twitter @ChrisKaergard.